Last year, we covered the shutdown of one of Africa’s biggest e-commerce companies. In that article, we showed that Africa’s business landscape is constantly evolving and that businesses that fail to adjust to these changes will go extinct. This evolving landscape has also made British banks divest from Africa, as the financial sector is no longer the same.
Africa has garnered global interest as a growth market. Last year, private equity investment in Africa reached an all-time high. Aside from the continent’s huge landmass and young population, its technological growth makes it highly prospective. However, technological advancement also translates to disruptions that affect existing businesses.
The pandemic birthed several technological disruptions. For instance, video conferencing and productivity apps have made remote work easier, thus reducing the demand for office spaces among startups. Last year, there was more tech usage than ever before, and more businesses will be affected. Here are some notable trends that will disrupt Africa’s business space this year.
The rise of telemedicine
The African health tech sector is thriving. The number of startups in the space and the amount of funding have soared. The pandemic has forced traditional healthcare providers to change their models and adopt new tech products, consequently creating opportunities in the industry.
According to a report by Salient Advisory, telemedicine, combined with direct-to-consumer distribution, is the most common type of service offered by health innovators founded in the last five years. Companies now use tech-enabled solutions to change the distribution of health products. For instance, MYDAWA, a Kenyan online pharmacy, now offers telemedicine services powered by SASAdoctor. Also, e-commerce giants such as Jumia, Konga and Copia have all started selling over-the-counter health products.
Real estate is one of the oldest business industries in history. However, it is also one of the least transformed sectors and is due for a facelift. To this end, proptech startups are emerging to challenge orthodox thinking in the property space. Knight Frank’s The Africa Report captures the rise of this trend. “What started as a trickle through the introduction of online search platforms has become a wave of disruptive and cutting-edge technologies that continue to improve both transparency and efficiency”, the report said.
Last year, African proptech startups became more prominent. Nigeria’s Rent Small Small became the first African prop-tech startup to join Techstars Accelerator, Canada. Investors are also bullish on this sector; Seso Global raised $600,000 pre-seed last year.
Blockchain meets art and music
Recently, we spotlighted African artists using NFTs to tell the continent’s stories. Through NFTs, blockchain technology is influencing the business of arts and music. This phenomenon has gained global interest, and Africa’s tech space is surfing the wave: a South African NFT startup raised $5million last year.
Aside from the high profits making the news, the real disruption in NFTs is ownership. Artistes no longer have to wait for streaming platforms like Spotify to pay them commissions before they earn; they can sell directly to their listeners at their preferred prices without fear of piracy.
This rave is gradually creeping into the African music industry. Don Jazzy, a leader in the Nigerian music industry, now participates in the NFT space. Top artists such as M.I and Falz also showed interest in music NFTs last year.
Higher internet usage
In 2020, Africa’s internet economy contributed $115 billion to the continent and may bring in $180 billion by 2025. One of the catalysts of the internet economy is urban growth. A report by OECD suggests that Africa will have the fastest urban growth rate in the world. By 2025, 45 per cent of Africa’s population will live in cities.
Furthermore, tech giants such as Facebook and Google are building large cable networks to increase internet penetration on the continent. This rise in internet usage means increased visibility for businesses on the internet. But it also means that the internet culture, where speed and convenience are the priority, will spread even more.
Agriculture is big business in Africa, accounting for 14 per cent of GDP in sub-Saharan Africa. However, it still has a productivity problem because of the large percentage of smallholder farmers. To this end, agritech startups are rising and are showing impressive growth in Africa.
Innovative startups like Releaf and Hello Tractor secured investments last year and are disrupting the agric business. Agritech startups secured the second-largest portion of VC funding in 2020 and 2021. We are now seeing an increase in mission-driven agritechs using technology to increase productivity in the agric sector.
Written by Oluwatosin Ogunjuyigbe